Centre clarifies new amendments in I-T Act, restates limit on gold holding

New Delhi: The Centre on Thursday clarified that new amendments in the I-T Act approved by the Lok Sabha does not seek to tax inherited gold and jewellery and also those which have been purchased through disclosed or agriculture income.

It said that there is no limit on holding of gold jewellery provided it is acquired from explained sources of income including inheritance. “The Bill has not introduced any new provision regarding chargeability of tax on jewellery,” said finance ministry.

It pointed out that during searches by the income-tax department, there is a provision since 1994 that jewellery and ornaments to the extent of 500 gm for married woman, 250 gm for unmarried woman and 100 gm for male member will not be seized, even if prima facie, it does not seem to be matching with the income record of the assessee.

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It said the officer conducting search has the discretion not to seize even higher quantity of gold jewellery based on factors including family customs and traditions.

The Lok Sabha passed the Taxation Laws (2nd Amendment) Bill, which proposes a steep, up to 85 per cent tax and penalty, on undisclosed wealth that is discovered during searches.

The finance ministry said that the amended section only provides rate of tax to be charged in case of unexplained investment in assets.